The Campaign Gets Uglier by the Minute

Sarah Palin spent the weekend claiming that Barack Obama is a terrorist, or at least hangs out with one (not really, as CNN reports, but that isn't important to the McCain-Palin camp).

We knew this was coming, and there will be more. The funny thing about the Ayers claim, besides being false, is that Ayers is a respected university professor now, hardly the radical he was in the sixties. And, oh yeah, Obama has rejected Ayers's terrorist activities on many occasions.

It seems the Obama campaign was ready for this attack. Virtually overnight they released a 13 minute documentary on McCain's involvement in the Keating scandal, which looks eerily similar to the current financial crisis we are facing.

By elucidating the complex machinations of the Keating scandal, Obama’s video deals a powerful blow to McCain where he is perhaps most vulnerable—his troubled history with the economy and lackluster response to its latest downturn. But it remains to be seen whether anyone besides the die-hard wonks will sit through a 13-minute video about the economy—and how well Obama’s attack will stick as the opposition accuses him of “palling around with terrorists.”

For those too busy or campaign-weary to watch the entire video, its 30-second trailer (yes, apparently even campaign videos have trailers now) might prove more manageable.

It's worth sitting through the whole video.

Keating Economics: John McCain and the Making of a Financial Crisis

The current economic crisis demands that we understand John McCain's attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late '80s and early '90s.

John McCain was accused of improperly aiding his political patron, Charles Keating, chairman of the Lincoln Savings and Loan Association. The bipartisan Senate Ethics Committee launched investigations and formally reprimanded Senator McCain for his role in the scandal -- the first such Senator to receive a major party nomination for president.

At the heart of the scandal was Keating's Lincoln Savings and Loan Association, which took advantage of deregulation in the 1980s to make risky investments with its depositors' money. McCain intervened on behalf of Charles Keating with federal regulators tasked with preventing banking fraud, and championed legislation to delay regulation of the savings and loan industry -- actions that allowed Keating to continue his fraud at an incredible cost to taxpayers.

When the savings and loan industry collapsed, Keating's failed company put taxpayers on the hook for $3.4 billion and more than 20,000 Americans lost their savings. John McCain was reprimanded by the bipartisan Senate Ethics Committee, but the ultimate cost of the crisis to American taxpayers reached more than $120 billion.

The Keating scandal is eerily similar to today's credit crisis, where a lack of regulation and cozy relationships between the financial industry and Congress has allowed banks to make risky loans and profit by bending the rules. And in both cases, John McCain's judgment and values have placed him on the wrong side of history.

I wish the campaign could have stayed on the issues, but the Karl Rove disciples running McCain's agenda have been leaning negative for weeks now, and this is the week they decided to stop talking about the economy (an issue they are losing on, badly) and attack Obama's character.

Looks like Obama can give as good as he gets.

Tags: Campaign Gets Ugly, John McCain, Keating, scandal, smears, Politics, economics, society, Obama, Keating Economics, Financial Crisis